Pinyo at Moolanomy has a monthly feature where Larry Swedroe, his resident expert, answers readers questions on investing.  I sent a couple of questions Larry’s way and he provided some excellent answers:

PT: I have my entire 401K invested in a target-date fund (2040) through Schwab. What is your opinion on these types of mutual funds (including the fees)?

Larry: “There are several benefits of these funds; simplicity being among them. Also if they are well structured they are also well diversified, including international equities. And they automatically rebalance. I would recommend them only if they use passive funds like index funds and also have low costs like Vanguard’s funds. No reason to pay higher expenses.”  Read the rest of Larry’s answer…

PT: Considering US company stocks are only a small percentage of the world’s available stocks. Doesn’t that make you poorly diversified by following the 15-20% international stocks rule of thumb?

Larry: “First, the US is is not a small percentage of global equities. It is above 40%. Second, in my opinion that is a bad rule of thumb anyway. I believe investors should consider having 50 percent of their equities in international stocks and have at least 30 percent.”  Read the rest of Larry’s answer…

Related posts:

1. Investing in Single Stocks – Why I Don’t Do It?
2. Keep Investing Simple: Taxable vs Tax-Advantaged Investing
3. 5 Questions With The Money Life Network Members: My Investing Blog
4. Roth IRA vs 401K: Which is Better?
5. An Interview with Larry Winget, Author of People Are Idiots and I Can Prove It!